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A new client has asked us for advice as he wishes to sell his bookkeeping and payroll services business. He already has a purchaser in view who has offered £250,000 for the goodwill. On investigation, we have found that the client commenced business as a sole trader in the mid-1980s. In 2001-02, he set up a company and started invoicing his clients through the company; staff salaries and all other expenses were also then paid through the company. No documentation was prepared at the time to evidence the transfer of the trade.
A new client has asked us for advice as he wishes to sell his bookkeeping and payroll services business. He already has a purchaser in view who has offered £250 000 for the goodwill. On investigation we have found that the client commenced business as a sole trader in the mid-1980s. In 2001-02 he set up a company and started invoicing his clients through the company; staff salaries and all other expenses were also then paid through the company. No documentation was prepared at the time to evidence the transfer of the trade.
The sole trader did not cease and periodically raised invoices to the company for management services and the use of goodwill by the company the view being taken that the goodwill was still owned by the individual. The invoices to the company were declared as income in the sole trader accounts (which contained...
